http://www.allheadlinenews.com/articles/7004659264
Study:Outsourcing Raises U.S. Wages August 26, 2006 6:01 a.m. EST Josephine Roque - All Headline News Staff Writer Jackson Hole, WY (AHN) - Two Princeton University economists claim that job outsourcing increased productivity and real wages for low-skilled U.S. workers. Princeton professors Gene Grossman and Esteban Rossi-Hansberg debated that salaries for the least-skilled blue collar jobs had been increasing since 1997 as outsourcing pushed productivity. They discussed their paper during the Kansas City Federal Reserve conference with the theme, "The New Economic Geography." The Princeton economists say that critics tended to gloss over the productivity benefits that come with offshoring labor. They showed evidence that the resulting productivity had actually increased real wages for the least skilled among U.S. workers by about a quarter of a percent per year between 1997 and 2004. Grossman and Rossi-Hansberg said outsourcing critics had cited "incomplete" figures that the low-wage labor overseas decreases low-skill wages or increases unemployment in the United States. Rising productivity related to U.S. firm outsourcing "have served to bolster U.S. wages ... contrary to the fears of Lou Dobbs and others," they said relating to the high-profile CNN anchorman who has rallied against U.S. outsourcing. "We need to move away from the traditional approaches to trade in which only goods can be exchanged internationally, and move toward a new paradigm," they said. The economists added that global trade is not only through goods but tasks which allows specialization without geographic concentration. "This has allowed firms to take advantage of differences in factor costs and expertise across countries, thereby enhancing the benefits of specialization," they said.
